The Paradox of Choice: Why More Is Less

My notes from The Paradox of Choice: Why More Is Less, by Barry Schwartz.

• As the number of options increases, the psychological stakes rise accordingly.
• A majority of people want more control over the details of their lives, but a majority of people also want to simplify their lives. There you have it - the paradox of our times.- The transformation of choice in modern life is that choice in many facets of life has gone from implicit and often psychologically unreal to explicit and psychologically very real. So we now face a demand to make choices that is unparalleled in human history.
• The process of goal setting and decision making begins with the question: “What do I want?”
• What we remember about the pleasurable quality of our past experiences is almost entirely determined by two things: how the experiences felt when they were at their peak (best or worst), and how they felt when they ended.
• The summaries in turn influence our decisions about whether to have that experience again, and factors such as the proportion of pleasure to displeasure during the course of the experience or how long the experience lasted, have almost no influence on our memory.
• Neither our predictions about how we will feel after an experience nor our memories of how we did feel during the experience are very accurate reflections of how we actually do feel while the experience is occurring. And yet it is memories of the past and expectations for the future that govern our choices.
• Even if we can accurately determine what we want and then find good information, in a quantity we can handle, do we really know how to analyze, sift, weigh, and evaluate it to arrive at the right conclusions and make the right choices? Not always.
• The availability heuristic says that we assume that the more available some piece of information is to memory, the more frequently we must have encountered it in the past. This heuristic is partly true. In general, the frequency of experience does affect its availability to memory. But frequency of experience is not the only thing that affects availability to memory. Salience or vividness matters as well.
  • One way is to compare the price of one suit to another, which means using the other items as anchors, or standards.
  • There seems to be little we can do to avoid being influenced by the alternatives that anchor our comparison processes.
• Context that influences choice can also be created by language.
  • It seems to be a fairly general principle that when making choices among alternatives that involve a certain amount of risk or uncertainty, we prefer a small, sure gain to a larger, uncertain one.
  • When the possibilities involve losses, however, we will risk a large loss to avoid a smaller one.
  • Based on one presentation, people chose risk, and based on the other, certainty. Just as in the matter of discounts and surcharges, it is the framing of the choice that affects our perception of it, and in turn affects what we choose.
• Some studies have estimated that losses have more than twice the psychological impact as equivalent gains. The fact is, we all hate to lose, which Kahneman and Tversky refer to as loss aversion.
  • This phenomenon is called the endowment effect. Once something is given to you, it’s yours. Once it becomes part of your endowment, even after a very few minutes, giving it up will entail a loss.
  • The endowment effect helps explain why companies can afford to offer money-back guarantees on their products. Once people own them, the products are worth more to their owners than the mere cash value, because giving up the products would entail a loss. Most interestingly, people seem to be utterly unaware that the endowment effect is operating, even as it distorts their judgment.
• Susceptibility to error can only get worse as the number and complexity of decisions increase, which in general describe the conditions of daily life. Nobody has the time or cognitive resources to be completely thorough and accurate with every decision, and as more decisions are required and more options are available, the challenge of doing the decision making correctly becomes ever more difficult to meet.
  • The growth of options and opportunities for choice has three, related, unfortunate effects.
    1. It means that decisions require more effort.
    2. It makes mistakes more likely.
    3. It makes the psychological consequences of mistakes more severe.
• Choosing wisely begins with developing a clear understanding of your goals. And the first choice you must make is between the goal of choosing the absolute best and the goal of choosing something that is good enough.
• The alternative to maximizing is to be a satisficer. To satisfice is to settle for something that is good enough and not worry about the possibility that there might be something better. A satisficer has criteria and standards. She searches until she finds an item that meets those standards, and at that point, she stops.
  • We have to ask ourselves what counts when we assess the quality of a decision. Is it objective results or subjective experiences?
  • What matters to us most of the time, I think, is how we feel about the decisions we make.
  • While objective experience clearly matters, subjective experience has a great deal to do with the quality of that objective experience.
  • While maximizers and perfectionists both have very high standards, I think that perfectionists have very high standards that they don’t expect to meet, whereas maximizers have very high standards that they do expect to meet.
• Choice has a clear and powerful instrumental value; it enables people to get what they need and want in life.
  • Every choice we make is a testament to our autonomy, to our sense of self-determination.
  • But choices have expressive functions only to the extent that we can make them freely.
  • Quite apart from the instrumental benefits of choice - that it enables people to get what they want - and the expressive benefits of choice - that it enables people to say who they are - choice enables people to be actively and effectively engaged in the world, with profound psychological benefits.
  • Part of the downside of abundant choice is that each new option adds to the list of trade offs, and trade offs have psychological consequences.
  • The necessity of making trade-offs alters how we feel about the decisions we face; more important, it affects the level of satisfaction we experience from the decisions we ultimately make.
• Economists point out that the quality of any given option cannot be assessed in isolation from its alternatives. One of the “costs” of any option involves passing up the opportunities that a different option would have afforded. This is referred to as an opportunity cost.
  • Thinking about opportunity costs may not change the decision you make, but it will give you a more realistic assessment of the full implications of that decision.
  • According to standard economic assumptions, the only opportunity costs that should figure into a decision are the ones associated with the next-best alternative.
  • Because we don’t put rejected options out of our minds, we experience the disappointment of having our satisfaction with decisions diluted by all the options we considered but did not choose.
  • The trick is to limit the set of possibilities so that the opportunity costs don’t add up to make all the alternatives unattractive.
  • For most of human history, people were not really faced with an array of choices and opportunity costs. In a world of scarcity, opportunities don’t present themselves in bunches, and the decisions people face are between approach and avoidance, acceptance or rejection.
  • Perhaps one of the reasons major decisions are so difficult is that they are largely nonreversible.
  • Nobody likes to make trade offs. Nobody likes to watch opportunity costs mount. But the problem of trade-offs and opportunity costs will be dramatically attenuated for a satisficer.
  • Postdecision regret is sometimes referred to as “buyer’s remorse.”
  • The bitter taste of regret detracts from the satisfaction we get, whether or not the regret is justified. Anticipated regret is in many ways worse, because it will produce not just dissatisfaction but paralysis. If someone asks herself how it would feel to buy this house only to discover a better one next week, she probably won’t buy this house. Both
  • Types of regret - anticipated and postdecision - will raise the emotional stakes of decisions. Anticipated regret will make decisions harder to make, and postdecision regret will make them harder to enjoy.
  • We think that concern about regret is a major reason that individuals are maximizers.
  • Thinking about the world as it isn’t, but might be or might have been, is called counterfactual thinking.
  • The downside of counterfactual thinking is that it fuels regret, both postdecision regret and anticipated regret.
  • Unlike other negative emotions, what is so difficult about regret is the feeling that the regrettable state of affairs could have been avoided and that it could have been avoided by you, if only you had chosen differently.
  • Individuals facing decisions involving trade-offs, and thus opportunities for regret, will avoid making those decisions altogether. Or if they can’t avoid the decisions completely, they will construe them so that they no longer seem to involve trade-offs.
  • Another effect that the desire to avoid regret can have is to induce people not to act at all, what is called inaction inertia.
• In 1973, 13 percent of Americans thought of air-conditioning in their cars as a necessity. Today, 41 percent do. I know the earth is getting warmer, but the climate hasn’t changed that much in thirty years. What has changed is our standard of comfort. Even though we don’t expect it to happen, such adaptation to pleasure is inevitable, and it may cause more disappointment in a world of many choices than in a world of few.
  • Because of adaptation, enthusiasm about positive experiences doesn’t sustain itself.
  • Adaptation, by dramatically truncating the duration of those benefits, puts us into a state of mind where the result just wasn’t worth the effort. The more we invest in a decision, the more we expect to realize from our investment. And adaptation makes agonizing over decisions a bad investment.
  • Factoring in adaptation may help us be satisfied with choices that are good enough rather than “the best,” and this in turn will reduce the time and effort we devote to making those choices. Finally, we can remind ourselves to be grateful for what we have. Unlike adaptation, the experience of gratitude is something we can affect directly.
• What to do about choice?
  1. Choose When to Choose
     • The key thing to appreciate, though, is that what is most important to us, most of the time, is not the objective results of decisions, but the subjective results.
  2. Be a Chooser, Not a Picker
  • Choosers are people who are able to reflect on what makes a decision important, on whether, perhaps, none of the options should be chosen, on whether a new option should be created, and on what a particular choice says about the chooser as an individual.
  • Choosers have the time to modify their goals; pickers do not. Choosers have the time to avoid following the herd; pickers do not.
  • Good decisions take time and attention, and the only way we can find the needed time and attention is by choosing our spots.
  3. Satisfice More and Maximize Less
  • It is maximizers who suffer most in a culture that providestoo many choices. It is maximizers who have expectations that can’t be met.
  • Learning to accept “good enough” will simplify decision making and increase satisfaction.
  • The trick is to learn to embrace and appreciate satisficing, to cultivate it in more and more aspects of life, rather than merely being resigned to it.
  • To become a satisficer, however, requires that you think carefully about your goals and aspirations, and that you develop well-defined standards for what is “good enough” whenever you face a decision.
  4. Think About the Opportunity Costs of Opportunity Costs
  • When making a decision, it’s usually a good idea to think about the alternatives we will pass up when choosing our most-preferred option.
  • Ignoring these “opportunity costs” can lead us to overestimate how good the best option is. On the other hand, the more we think about opportunity costs, the less satisfaction we’ll derive from whatever we choose. So we should make an effort to limit how much we think about the attractive features of options we reject.
  5. Make Your Decisions Nonreversible
  • When we can change our minds about decisions, we are less satisfied with them. When a decision is final, we engage in a variety of psychological processes that enhance our feelings about the choice we made relative to the alternatives.
  6. Practice an “Attitude of Gratitude”
  • Our evaluation of our choices is profoundly affected by what we compare them with, including comparisons with alternatives that exist only in our imaginations.
  • We can vastly improve our subjective experience by consciously striving to be grateful more often for what is good about a choice or an experience, and to be disappointed less by what is bad about it.
  7. Regret Less
  • The sting of regret (either actual or potential) colors many decisions, and sometimes influences us to avoid making decisions at all.
  • We can mitigate regret by adopting the standards of a satisficer rather than a maximizer, reducing the number of options we consider before making a decision, and practicing gratitude for what is good in a decision rather than focusing on our disappointments with what is bad.
  8. Anticipate Adaptation
  • We can’t prevent adaptation. What we can do is develop realistic expectations about how experiences change with time.
  9. Control Expectations
  • Our evaluation of experience is substantially influenced by how it compares with our expectations
  • Reduce the number of options you consider. Be a satisficer rather than a maximizer. Allow for serendipity.
  10. Curtail Social Comparison
  • We evaluate the quality of our experiences by comparing ourselves to others.
  • Though social comparison can provide useful information, it often reduces our satisfaction. So by comparing ourselves to others less, we will be satisfied more.
  • Focus on what makes you happy, and what gives meaning to your life.
  11. Learn to Love Constraints
  • As the number of choices we face increases, freedom of choice eventually becomes a tyranny of choice.